Illegal online gambling ring involving BetUS
(UPDATE)
US Department of Justice press release:
A federal grand jury in Salt Lake City
returned a 34-count indictment Wednesday afternoon charging
seven individuals and four companies with conspiring to violate
laws prohibiting Internet gambling, U.S. Attorney Brett L.
Tolman for the District of Utah, and Special Agent in Charge Wes
Eddy of the IRS Criminal Investigation Division's Las Vegas
Field Office.
The indictment, unsealed on May 10, 2007, alleges the defendants
operated a business that helped Internet gambling websites to
disguise credit card charges for gambling as charges for
something else, thereby deceiving credit card issuers who
otherwise would not have authorized the transactions. The
indictment also alleges the defendants' businesses also assisted
Internet gambling websites by arranging fund transfers between
bettors in the United States and various Internet gambling
websites using Western Union wire transfers. One Internet
gambling website, BetUS, is also charged with conspiring with
the individuals named in the indictment. According to BetUS's
website, BetUS provides internet based sports and casino
gambling.
During the course of their conspiracy, the indictment alleges
that the defendants facilitated the payment of more than $150
million to illegal Internet gambling websites.
Charged in the indictment are Baron Lombardo, 46, of Las Vegas;
Richard Carson-Selman, 51, of Las Vegas; Henry G. Bankey, 49, of
Las Vegas; Francisco Lombardo a.k.a. Frank Lombardo, 52, of Las
Vegas; Count C. Lombardo, 43, of Las Vegas; Tina I. Hill, 32, of
Sandy, Utah and Las Vegas; Kimberlie Lombardo a.k.a. Kittie
Lombardo, 43, of Las Vegas; CurrenC, Ltd., also known as CurrenC
WorldWide, LTD., of Road Town, Tortola, British Virgin Islands;
Gateway Technologies, LLC., of Draper, Utah; Hill Financial
Services, Inc., of Draper, Utah, and Las Vegas; and BetUS of
Kanawahke, Canada.
"Virtually all Internet gambling is illegal. Individuals and
businesses that facilitate illegal Internet gambling are
violating numerous federal and state laws," U.S. Attorney Brett
L. Tolman said. "Payment processors who attempt to hide the true
nature of the transactions they are conducting and the Internet
gambling websites that use these payment processors will be
prosecuted and brought to justice."
"Internet gambling, along with other types of 'illegal
e-commerce,' are areas of interest to IRS Criminal
Investigation," IRS Special Agent in Charge Eddy said.
"Laundering money from illegal activity such as illegal internet
gambling is a crime. Regardless of how the money changes
hands-via cash, check, wire transfers or credit cards-and
regardless of where the money is stored-in a United States
financial institution or an off shore bank-we will trace the
funds and seize them. IRS Criminal Investigation will vigorously
investigate and prosecute the owners and operators of these
illegal enterprises to the fullest extent possible."
The defendants are charged with RICO conspiracy, bank fraud,
violations of the wire-wager act, and money laundering. In
addition to the criminal charges, the indictment also contains a
forfeiture provision seeking forfeiture of $150 million as well
as real estate, vehicles, and funds in numerous bank accounts.
The indictment alleges the individual defendants and three
related businesses, CurrenC, LTD, also known as CurrenC
Worldwide LTD; Gateway Technologies, LLC; Hill Financial
Services, as well as BetUS, conspired to promote illegal
Internet gambling in the United States. The indictment alleges
the defendants operated a payment processing business that
catered to illegal Internet gambling businesses. As a part of
their payment processing services, the indictment alleges that
the defendants purposefully misclassified credit card
transactions to fool banks into processing Internet gambling
charges; collected monies transferred from bettors in the United
States via credit card transactions; and transferred the
collected funds to various Internet gambling web site operators.
The indictment further alleges that the purpose of the
defendants' business was to help gambling websites have their
transactions approved by Visa and MasterCard issuing banks,
which would not knowingly authorize Internet gambling
transactions.
The indictment alleges that the defendants also conspired to
offer their illegal Internet gambling websites another payment
processing option through Western Union wire transfers.
According to the indictment, the defendants caused the illegal
Internet gambling website's customers to wire funds through
Western Union to people in the Philippines who were associated
with the defendants. The defendants then caused these associates
in the Philippines to transfer funds to accounts controlled by
the defendants.
In order to operate their illegal payment processing business,
the indictment alleges the defendants created a website they
called "the Gateway." The Gateway was an automated collector and
processor of illegal Internet gambling funding transactions. The
indictment alleges that the defendants caused the Gateway to
misclassify the transactions to Visa and MasterCard,
representing that the transactions were for something other than
gambling. In this manner, the defendants assisted illegal
Internet gambling websites in having their gambling transactions
authorized by Visa and MasterCard issuing banks.
The indictment further alleges that the defendants used offshore
accounts to receive the proceeds of their payment processing
business. The defendants then caused this money to be
transferred to their client websites. For their services, the
defendants collected per-transaction fees from their clients.
The defendants allegedly transferred their proceeds to
businesses in the United States that they owned and controlled,
including Gateway Technologies and Hill Financial. According to
the indictment, the defendants also used trusts, including
Bablcom Domestic Non Grantor Insurance Trust, Landbaron Ultra
Trust, Behnke Domestic Non Grantor Insurance Trust, Lime Light
Domestic Non Grantor Insurance Trust and Red Dogg Ultra Trust,
to conceal their profits from their illegal payment processing
business. The defendants then used the funds transferred to
trust bank accounts to make investments and to buy real
property, cars, and other personal property.
None of the defendants are in custody at this time. Richard
Carson-Selman was arrested on May 10, 2007, in Las Vegas. He had
an initial appearance in Las Vegas yesterday and was released on
conditions under the supervision of pre-trial services. Baron
Lombardo will self-surrender in Las Vegas today and will have an
initial appearance. All of the defendants are scheduled to be
arraigned in U.S. District Court in Salt Lake City on Wednesday,
May 30, at 10 a.m. before U.S. Magistrate Judge Paul Warner.
The potential maximum penalties for the counts in the indictment
include 20 years for racketeering conspiracy; 30 years for bank
fraud; two years for transmission of wagers/wagering
information; and 20 years for money laundering.
Defendants charged in indictments are presumed innocent unless
or until proven guilty in court.
The case is being investigated by the IRS Criminal Investigation
Division and is being prosecuted by Assistant U.S. Attorney D.
Loren Washburn of the District of Utah and trial attorney Marty
Woelfle of the Criminal Division's Organized Crime and
Racketeering Section.
Source: U.S. Department of Justice
05/11/2007
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